Wells Fargo
November 1, 2021 11:46 PM Subscribe
Wells Fargo is offering a promotion where, if you deposit $5000 and keep it in for 60 days and until the 20th day of the third month (IOW, 80 days), on the 81st day, they say I can withdraw it and keep it with no penalty and close the account.
Wells Fargo isn't exactly my spirit animal, but $500 is $500. When I asked the manager, she said Wells Fargo is trying to win your trust back. And with each and every one of the scandals Wells Fargo has stepped in, I am not surprised at such a public affairs move. But I wasn't expecting such direct honestly. So, what are they getting out of it?
Wells Fargo isn't exactly my spirit animal, but $500 is $500. When I asked the manager, she said Wells Fargo is trying to win your trust back. And with each and every one of the scandals Wells Fargo has stepped in, I am not surprised at such a public affairs move. But I wasn't expecting such direct honestly. So, what are they getting out of it?
Aside: is this for new accounts, or?
If so, they get new accounts, and lots of money.
posted by firstdaffodils at 12:04 AM on November 2, 2021
If so, they get new accounts, and lots of money.
posted by firstdaffodils at 12:04 AM on November 2, 2021
This is a common promo to get you to switch banking accounts.
By the time you've changed all your direct deposit information, added a new credit card linked to the account, filled out all the paperwork, and gotten used to how their website works, the bank is counting on it being too much of a hassle to close the account and do all the exact same things at another bank. All this overhead is "sticky" - people usually stick with the same account unless there's a compelling reason to switch.
posted by meowzilla at 12:18 AM on November 2, 2021 [19 favorites]
By the time you've changed all your direct deposit information, added a new credit card linked to the account, filled out all the paperwork, and gotten used to how their website works, the bank is counting on it being too much of a hassle to close the account and do all the exact same things at another bank. All this overhead is "sticky" - people usually stick with the same account unless there's a compelling reason to switch.
posted by meowzilla at 12:18 AM on November 2, 2021 [19 favorites]
For what it's worth, that's a 10% return in 3 months. Pretty good, but I've been getting similar (slightly worse) by investing in the S&P500 index funds. I prefer the flexibility and low maintenance of just depositing every few months.
If you have an employer and a 401k, make sure you've "invested" your 401k in index funds. I would recommend increasing your contribution to there rather than the Wells Fargo deal, as then you are investing tax free as well.
posted by bbqturtle at 1:35 AM on November 2, 2021 [5 favorites]
If you have an employer and a 401k, make sure you've "invested" your 401k in index funds. I would recommend increasing your contribution to there rather than the Wells Fargo deal, as then you are investing tax free as well.
posted by bbqturtle at 1:35 AM on November 2, 2021 [5 favorites]
I do this all the time, although I’ve never done it with Wells Fargo. I generally pull in $1-2K a year from bank bonuses. I do this in addition to investing, because there’s almost no risk with chasing bank bonuses, unlike with stock market investing. I am basically always moving my emergency fund money around to different banks. It helps that my company’s payroll service lets me change my own direct deposit info (a lot of banks want you to have X direct deposits in order to avoid fees).
Sometimes I mess up and I either don’t get the bonus or I get charged a fee. I never actually switch my primary checking relationship (and actually trying out these other banks generally just reinforces for me how much better the customer experience is at my regular bank, CapitalOne).
If you make sure you understand all the rules (both the rules to get the bonus and the rules to avoid fees), this is a pretty safe bet.
posted by mskyle at 3:46 AM on November 2, 2021 [11 favorites]
Sometimes I mess up and I either don’t get the bonus or I get charged a fee. I never actually switch my primary checking relationship (and actually trying out these other banks generally just reinforces for me how much better the customer experience is at my regular bank, CapitalOne).
If you make sure you understand all the rules (both the rules to get the bonus and the rules to avoid fees), this is a pretty safe bet.
posted by mskyle at 3:46 AM on November 2, 2021 [11 favorites]
This sounds pretty standard to me, it’s in line with other banking promos I’ve heard of. They’re hoping you end up liking banking with them and keep your account (or forget to close it, as the case may be).
$5000 is a lot of money — not a lot of people just have $5000 sitting around in cash, which limits the number of people eligible for the promotion. And if you do have that kind of cash, they want your business.
Doesn’t sound fishy to me, just make sure you understand all the terms.
posted by mekily at 5:38 AM on November 2, 2021 [4 favorites]
$5000 is a lot of money — not a lot of people just have $5000 sitting around in cash, which limits the number of people eligible for the promotion. And if you do have that kind of cash, they want your business.
Doesn’t sound fishy to me, just make sure you understand all the terms.
posted by mekily at 5:38 AM on November 2, 2021 [4 favorites]
Normal, legit. I just made $750 on a similar deal. They are hoping inertia will keep you banking with them and that you’ll eventually buy other products (loans, etc.).
posted by HotToddy at 6:09 AM on November 2, 2021 [1 favorite]
posted by HotToddy at 6:09 AM on November 2, 2021 [1 favorite]
Yep. I, too, tend to do a couple of these deals a year. Always a net positive, though occasionally there is an issue with a bank where I don't end up getting the bonus for dumb logistical reasons. Just make sure you don't deposit any money you can't afford to have temporarily tied up in transfers in case something goes awry with the processing, and carefully review the other rules, paying special attention to fees.
Pretty good, but I've been getting similar (slightly worse) by investing in the S&P500 index funds. I prefer the flexibility and low maintenance of just depositing every few months.
S&P 500 not only does not guarantee any return, the entire principal is subject to loss. The bank bonus is guaranteed. It is not a similar strategy at all, and if you are getting a worse return for investing in a riskier investment in your successful times, you are screwing yourself over.
posted by praemunire at 6:45 AM on November 2, 2021 [6 favorites]
Pretty good, but I've been getting similar (slightly worse) by investing in the S&P500 index funds. I prefer the flexibility and low maintenance of just depositing every few months.
S&P 500 not only does not guarantee any return, the entire principal is subject to loss. The bank bonus is guaranteed. It is not a similar strategy at all, and if you are getting a worse return for investing in a riskier investment in your successful times, you are screwing yourself over.
posted by praemunire at 6:45 AM on November 2, 2021 [6 favorites]
For what it's worth, that's a 10% return in 3 months. Pretty good, but I've been getting similar (slightly worse) by investing in the S&P500 index funds. I prefer the flexibility and low maintenance of just depositing every few months.
If you have an employer and a 401k, make sure you've "invested" your 401k in index funds. I would recommend increasing your contribution to there rather than the Wells Fargo deal, as then you are investing tax free as well.
please don't do this. It is stunningly bad advice. A riskless 10% is very very very different from a risky 10%.
posted by JPD at 6:54 AM on November 2, 2021 [6 favorites]
If you have an employer and a 401k, make sure you've "invested" your 401k in index funds. I would recommend increasing your contribution to there rather than the Wells Fargo deal, as then you are investing tax free as well.
please don't do this. It is stunningly bad advice. A riskless 10% is very very very different from a risky 10%.
posted by JPD at 6:54 AM on November 2, 2021 [6 favorites]
Pretty good, but I've been getting similar (slightly worse) by investing in the S&P500 index funds.
These promos are a good place to park your emergency fund, which should always be in a cash equivalent. At best you make more money than a savings rate would have, at worst you miss out on the bonus cash if something happens and you have to use your fund.
.All this overhead is "sticky" - people usually stick with the same account unless there's a compelling reason to switch.
In addition to this, they usually come with a number of things that you have to do in order to get the bonus like a certain number of debit transactions or whatever, and a surprisingly high number of people don't keep track of doing all of them and become ineligible for the bonus, yet remain anyway because of the stickiness.
posted by Candleman at 7:12 AM on November 2, 2021 [2 favorites]
These promos are a good place to park your emergency fund, which should always be in a cash equivalent. At best you make more money than a savings rate would have, at worst you miss out on the bonus cash if something happens and you have to use your fund.
.All this overhead is "sticky" - people usually stick with the same account unless there's a compelling reason to switch.
In addition to this, they usually come with a number of things that you have to do in order to get the bonus like a certain number of debit transactions or whatever, and a surprisingly high number of people don't keep track of doing all of them and become ineligible for the bonus, yet remain anyway because of the stickiness.
posted by Candleman at 7:12 AM on November 2, 2021 [2 favorites]
The relevant comparison is not the risky S&P return, or even the return on CDs, which is pretty close to zero over 80 days. Rather, it's your hourly wage: How much would you charge someone to do the paperwork of setting up an account? If it's less than $500, it's worth it.
posted by Mr.Know-it-some at 7:27 AM on November 2, 2021 [5 favorites]
posted by Mr.Know-it-some at 7:27 AM on November 2, 2021 [5 favorites]
The rich people that I know who possess executive functioning skills definitely do this. I heard it discussed at multiple dinner parties pre-covid.
posted by twelve cent archie at 7:35 AM on November 2, 2021 [1 favorite]
posted by twelve cent archie at 7:35 AM on November 2, 2021 [1 favorite]
Rather, it's your hourly wage: How much would you charge someone to do the paperwork of setting up an account? If it's less than $500, it's worth it.
Only if there's an infinite market for your labor, such that you can be confident of selling all your free hours...which there probably isn't.
posted by praemunire at 7:53 AM on November 2, 2021 [1 favorite]
Only if there's an infinite market for your labor, such that you can be confident of selling all your free hours...which there probably isn't.
posted by praemunire at 7:53 AM on November 2, 2021 [1 favorite]
BTW, in case you didn't know, this is taxable income and you will get a 1099-INT for it.
posted by praemunire at 7:56 AM on November 2, 2021 [4 favorites]
posted by praemunire at 7:56 AM on November 2, 2021 [4 favorites]
Another downside is that... you will have done business with Wells Fargo. I used to have an account with Deutsche Bank; I wouldn't do business with them now if they offered me a free car.
posted by SPrintF at 8:11 AM on November 2, 2021 [2 favorites]
posted by SPrintF at 8:11 AM on November 2, 2021 [2 favorites]
I wouldn't do business with them now if they offered me a free car.
I wouldn't even take a "free" car from them (Wells Fargo, not DB): WF used to sign people up for car insurance without telling them, which lead to car repossession and long-term credit problems.
Make sure you read the fine print. They may be offering $500 for "free", but it would probably cost a lot more to keep a lawyer on retainer to deal with the aftermath.
posted by They sucked his brains out! at 12:06 PM on November 2, 2021 [3 favorites]
I wouldn't even take a "free" car from them (Wells Fargo, not DB): WF used to sign people up for car insurance without telling them, which lead to car repossession and long-term credit problems.
Make sure you read the fine print. They may be offering $500 for "free", but it would probably cost a lot more to keep a lawyer on retainer to deal with the aftermath.
posted by They sucked his brains out! at 12:06 PM on November 2, 2021 [3 favorites]
This is a very common type of promotion. There are whole websites dedicated to tracking banks' signup bonuses and providing guidance on how best to exploit them, such as Doctor of Credit.
It looks like the standard Wells Fargo signup bonus available to the public right now is $200 (Doctor of Credit page, Wells Fargo page), so your $500 deal must be a targeted offer, I guess?
Sounds like a good deal as bank signup bonuses go, although be careful to read the fine print and watch out for fees and limitations. I notice that the Doctor of Credit page about a 2019 targeted $500 offer from Wells Fargo warned of a monthly service fee on the account, so you might want to check on any monthly fees for your offer.
posted by Syllepsis at 8:53 PM on November 2, 2021 [1 favorite]
It looks like the standard Wells Fargo signup bonus available to the public right now is $200 (Doctor of Credit page, Wells Fargo page), so your $500 deal must be a targeted offer, I guess?
Sounds like a good deal as bank signup bonuses go, although be careful to read the fine print and watch out for fees and limitations. I notice that the Doctor of Credit page about a 2019 targeted $500 offer from Wells Fargo warned of a monthly service fee on the account, so you might want to check on any monthly fees for your offer.
posted by Syllepsis at 8:53 PM on November 2, 2021 [1 favorite]
This is how I bought my current iMac.
posted by kirkaracha at 9:49 PM on November 2, 2021 [2 favorites]
posted by kirkaracha at 9:49 PM on November 2, 2021 [2 favorites]
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